Answer the Following Questions Based on the Accompanying Graph

question 44

Essay

Answer the following questions based on the accompanying graph.

a.What is the profit-maximizing price and quantity?
b.At the profit-maximizing price and quantity,what are the total profits or losses made by this firm?
c.At the profit-maximizing price and quantity,what is the approximate deadweight loss incurred by society?

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Definitions:

Close Position

The act of selling or buying securities to offset an existing position, thereby ending the investor's exposure to that investment.

Delivery Date

In the context of futures contracts, it is the specified date on which the underlying asset must be delivered by the seller to fulfill the terms of the contract.

Sell

The act of disposing of an asset or security in exchange for cash or another financial instrument.

Margin

The amount of equity contributed by an investor as a percentage of the current market value of the securities held in a margin account.